Nepal's Maoist prime minister, Pushpa Kamal Dahal, has resigned from the cabinet in a crisis triggered by his sacking of the country's army chief.
The government fired General Rookmangud Katawal at the weekend for allegedly disobeying instructions not to hire new recruits and refusing to accept the supremacy of the civilian authorities.
But late yesterday the country's president, Ram Baran Yadav, who is formally commander-in-chief of the army, denounced the sacking as unconstitutional and overruled the prime minister. He ordered Katawal to return to work.
"I have resigned from the cabinet," Prachanda announced in a televised address to the nation today. His departure is a severe setback to the peace pact, concluded in 2006, ending a decade-long civil war between Maoist insurgents and the army. The agreement enabled the Maoists to enter the political mainstream and they won the election last year.
Two other parliamentary groups, previously allied to the Maoists, have withdrawn from the ruling coalition in protest at the army chief's dismissal, leaving the Maoists with a thin majority.
The Maoists, who abolished the monarchy and turned the nation into a republic, now face the biggest political challenge of their short reign. Demonstrations in support and against the army chief's sacking erupted in the capital city, Kathmandu, shortly after the government announced its decision and top army commanders met at an emergency meeting.
Katawal is a capable yet controversial officer with strong support within the army – unlike his number two, whom the government has named as the new army chief.
Even though the royal family adopted Katawal, and he grew up in the palace, he did not oppose the move to abolish the monarchy. He became army chief despite doubts about his alleged role in a particularly brutal phase of the 10-year civil war between the Nepal army and the Maoist People's Liberation Army.
But the main cause of his tussle with Dahal is his resistance to inducting into the army more than 19,000 former Maoist guerrillas who are housed in camps run by the United Nations. Katawal has been taking recruits from elsewhere.
As a result, the prime minister faced a virtual rebellion from militant sections in his party led by the defence minister. If he did not act against his army chief, he risked losing control of his party.
After Dahal's government lost its majority yesterday, the Maoists were said to be talking to smaller parties in search of new allies in the national assembly, while opposition groups were exploring the possibility of an alternative government. Recent rumours of an impending army coup also gained momentum.